Owner of Detroit’s Avalon Bakery: ‘No loan can fix’ impact of virus on business

Avalon International Breads in Detroit.
Avalon International Breads in Detroit. (Avalon/Facebook)

DETROIT – The owner of Detroit’s Avalon Bakery is offering some insight into the impact of coronavirus on small business in Detroit.

Jackie Victor, founder and an owner of Avalon International Breads, posted an opinion piece in the New York Times this week. She said Avalon was approved for a loan through the Paycheck Protection Program, but the damage is far greater than being able to cover paychecks for a short period.

“As of March 16, we employed 135 people and delivered to over 100 restaurants, cafes and grocery stores. We were just starting to ramp up statewide distribution. And after a frenetic and challenging five years of growth, we had built up the personnel, demand and operations to take our business to the next level,” Victor writes.

“Eight days later, we were down to one employee: our 25-year-old chief financial officer, who has proved to be wise beyond his years. The other 134 employees were laid off. Our restaurants were dark."

Victor says members of her staff have been hard hit by the virus.

“One manager lost three family members. Two members of our leadership team were down for a month with the virus. Compounding the stress of the situation, many employees have yet to see unemployment benefits or stimulus checks," Victor writes.

Victor says while she’s thankful for the loan through the PPP, the program is not enough to help small businesses reopen, and doesn’t take into account the lack of consumer spending.

“It’s difficult to successfully use the Paycheck Protection Program loan. The hurdles are high. Besides rent and utilities, the loan is meant to be spent on payroll within 60 days. If employers reach the same number of employees by the end of the period, then the amount spent on pay is forgiven. Any unforgiven portion turns into a loan to be paid back fully in 18 months. Even if we do manage to hire 135 employees and pay them for the next 60 days, it will be impossible for us to retain those employees while revenue is down 50 to 80 percent. In an economy with over 26 million people unemployed, consumer demand will be severely reduced.”

Read her full op-ed in the New York Times right here.

About the Author:

Ken Haddad is the digital special projects manager for WDIV / ClickOnDetroit.com. He also authors the Morning Report Newsletter and various other newsletters. He's been with WDIV since 2013.